TAX-AIDE

TAX-AIDE

Schedule K-1

Pub 4491 – Pg 123

NTTC Training — 2013 1

TAX-AIDE

Schedule K-1

●Reports taxpayer’s share of income, other distributions, deductions, and credits from Estates and Trusts (Form 1041) Domestic Partnerships (Form 1065) S Corporations (Form 1120S)

●K-1s for Foreign Partnerships (Form 8865) are out of scope

NTTC Training — 2013 2

TAX-AIDE

Intake and Interview

● Look for K-1s

● Verify in scope!

NTTC Training 2013 3

TAX-AIDE

Schedule K-1

● In-scope K-1s contain ONLY Interest income (taxable and tax-exempt) Dividends (ordinary and qualified) Capital gains or losses (long or short) Royalty Income Foreign Tax paid for passive activities

●Anything else is Out-of-Scope

NTTC Training — 2013 4

TAX-AIDE

Schedule K-1 (Form 1041)

NTTC Training — 2013 5

Note: may have 2012 Form date but be 2013 income for taxpayer.

TAX-AIDE

Schedule K-1 (Form 1120S)

NTTC Training — 2013 6

TAX-AIDE

Schedule K-1 (Form 1065-B)

NTTC Training — 2013 7

TAX-AIDE

K-1 Interest Income

●Also look for exempt interest income

●Box number varies by form

● Look on the back of the form for the code descriptions

NTTC Training 2013 8

TAX-AIDE

Reporting Income from K-1

●Do NOT use K-1 worksheet Interest or Dividend Stmt – list payer as

[Company] K1 Net Capital Gain/Loss – Sch D Line 5 for

short-term, line 12 for long-term using scratch pad

NTTC Training — 2013 9

Pub 4012, pg D-3

TAX-AIDE

Reporting Income from K-1

Schedule E for royalties Foreign Tax paid on Form 1116

NTTC Training — 2013 10

Pub 4012, pg D-3

TAX-AIDE

Foreign Tax on K-1

●Box number varies by form

●Must be coded as Passive income

●Will be covered in later lesson

NTTC Training 2013 11

TAX-AIDE

Quality Review

●Verify in scope

●Verify tax year

●Verify entries On respective worksheets and forms Not on K-1 in TaxWise

NTTC Training 2013 12

TAX-AIDE

Exit Interview

●Will need to explain if out of scope

NTTC Training 2013 13

TAX-AIDE

Schedule K-1

NTTC Training 2013 14